Company Report

Date Published: March 23, 2021

SMART INVESTOR GUIDE

FUND FACTS

NatureOpen EndedFund ManagerHarish Krishnan
Launch Date04-Feb-2003Benchmark IndexNifty 50 TRI
NAV (Rs.)248.54 (9.12.19)Corpus (Rs.in Crs.)1469.78 (Nov-19)
Investment Objective To generate capital appreciation from a portfolio of predominantly equity and equity related securities falling under the category of large Cap companies. There is no assurance that the investment objective of the Scheme will be achieved.

PORTFOLIO COMPOSITION

The fund has 97.86% of its net assets invested into equity & equity related instruments, 0.63% in debt component and balance 1.50% in cash in its current’s portfolio ie November 2019. The large cap holdings constitute of 83.44% (market cap > Rs.27,454 crs), 10.48% in midcap (market cap > Rs.8,801 and < Rs.27,454 crs), 3.14% in smallcap (0 >Rs.8801) and balance 2.94% in debt and cash component. The top 10 holdings of the scheme constitute 55.70% of its net assets. It may be observed that the Quarterly Average AUM of the fund for the end of Sept 2019 is Rs.944.10 crs.

Table 1
Sectoral Allocation (in %) as on 29.11.2019
Top holdings of FundFund
Allocation
Banking & Financial41.43
Computers10.88
Consumer Goods8.52
Housing5.07
Auto4.52
Cement3.14
Pharma2.21
Capital Goods1.58
Metals1.39
Fertilisers1.16
Table 2
Month EndEquity %Debt %Cash %Scheme Returns %Index Returns %
29/11/201998.020.651.342.352.29
31/10/201998.020.651.344.223.70
30/09/201998.030.681.34.954.09
30/08/201996.440.313.260.45-0.34
31/07/201996.440.313.26-5.21-5.11
28/06/201998.710.291.00-1.19-0.95
31/07/201996.440.313.26-5.21-5.11
28/06/201998.711.000.29-1.19-0.95
31/05/201998.710.291.001.811.62
30/04/201998.560.291.150.641.04
29/03/201997.780.491.737.277.79
28/02/201997.780.491.732.091.37
Table 3
Top 10 Holdings (% in N.A)Nov-19May-19Dec-18
Reliance Industries Ltd.9.508.627.59
HDFC Bank Ltd.9.289.628.86
ICICI Bank Ltd.8.377.405.55
Infosys Ltd.5.365.664.69
Axis Bank Ltd.4.785.533.11
Housing Development Finance Corporation Ltd.4.453.753.93
Larsen & Toubro Ltd.3.853.533.30
Kotak Mahindra Bank Ltd.3.793.78
State Bank of India3.183.793.06
Tata Consultancy Services Ltd.3.143.843.86

PORTFOLIO ANALYSIS

The fund with a beta of 1.09 has a weighted market cap of Rs 1,43,450 crores as on November 29, 2019. The PE of the fund is 46.03 as on November 29, 2019. In the latest portfolio, the fund held 52 scrips, out of which 28 scrips were held since one-year period (Dec-2018 to Nov-2019). During the past one year, the fund manager has been constant with the number of scrips from 56 -52 scrips in Dec-2018 to Nov-2019, thereby showing not a major changes in the portfolio broad based. The fund stayed invested in Reliance Industries Ltd, HDFC Bank Ltd, ICICI Bank Ltd and Infosys Ltd, keeping its firm position on top 10 holdings throughout the year. Presently, the top five sectors account for 65.90% of net assets. The one-year return of the fund is 14.46% as against 12.53% of the benchmark index. During the one-year period, the fund’s exposure in  their net assets to the scrips such as Bharat Petroleum Corporation Ltd, Maruti Suzuki India Ltd, Coromandel International Ltd, Axis Bank Ltd, ICICI Bank Ltd gained  by 302%, 79%, 75%, 54% and 51% respectively, which contributed to the gain in one-year return. It may also be mentioned that the fund’s exposure in the sectors such as Banks which gained during the one year period by 21% added upside to one year return performance. Bajaj Finance Ltd, Gujarat Gas Co. Ltd and Tata Global Beverages Ltd are witnessed as new entrants in its current portfolio ie November 2019.

Table 1 above tabulates the allocation of top 10 sectors by the fund. The fund has an allocation to 10 sectors, wherein the top 5 sectors constitutes to 70.42%. The fund could outperform its benchmark index in only 10 out of 12 months during the last one year period, maintaining an average equity exposure of 97.80%.

The risk parameter graph measures standard deviation (S.D.) across all the Large cap schemes. The S.D. of the scheme is 8.09%, which is higher than the industry average of the Large Cap schemes of 7.24%. The Sharpe ratio of the scheme is -0.12%, which is higher than the industry average of -0.19%.

Monthly SIP and Lumpsum vis-à-vis Benchmark : Exhibit 2

Monthly SIPs Min (Rs. 1000 p.m.)
SIP PeriodAmt Invst. (Rs.)Kotak Bluechip Fund (Rs.)Nifty 50 TRI (Rs.)
Market ValueRets (%)Market ValueRets (%)
1-Yr.12,00013,08317.11%12,89014.00%
3-Yr.36,00041,6379.67%42,86511.66%
5-Yr.60,00076,4339.61%80,03311.46%
7-Yr.84,0001,27,32511.68%1,29,10912.06%
10-Yr.1,20,002,19,06811.57%2,19,74311.63%
SIP PeriodAmt Invst. (Rs.)Kotak Bluechip Fund (Rs.)Nifty 50 TRI (Rs.)
Market ValueRets (%)Market ValueRets (%)
1-Yr.12,00013,69014.13%13,48112.38%
3-Yr.36,00044,29910.75%46,31913.16%
5-Yr.60,00079,8989.70%83,50211.23%
7-Yr.84,0001,33,82811.67%1,35,63312.01%
10-Yr.1,20,0002,26,99811.33%2,28,87111.47%
Exhibit: 3

 Note: (1) Performance is as on November 29, 2019. (2) Returns are calculated on the basis of annual compounding.

As it may be observed in Exhibit 2, the fund has outperformed in returns vis-à-vis its benchmark across all time frames. The returns of the fund in both modes (ie. Monthly and Lumpsum) across various time periods witnessed with mixed noticeable variations.

Exhibit: 4

PERFORMANCE

In Exhibit 4, the scheme has outperformed the benchmark index in all the time horizons except for 3 years time horizon. However, it has under performed its benchmark in 3 years period. The fund has outperformed both its benchmark (Nifty 50 TRI) and the category average across time frames (6 months, one years, five years). Banks form a good portion of its portfolio apart from Computers, Consumer Goods and diversified companies, with a sizable chunk of the portfolio consisting of large cap investments. The fund portfolio is high on liquidity and quality, mainly due to its focus on promising large-caps. To add to the safety, across market cycles, the scheme maintains a cash position of upto 6 per cent in its portfolio. While the fund has under performed some of its peers over different time periods, it has managed to keep pace with its category average benchmark.

Kotak Bluechip Fund is a safe bet for investors looking to ride out the ongoing volatility in the markets. Benchmarked to the Nifty 50 TRI, the fund focuses on investing in large-cap stocks. It is adept at containing downsides and at the same time gives moderately good returns when the tide turns.

Please Note: The ratings mentioned in the report are declared by value research and crisil has ranked 3 for this fund. (for The quarter ended september 30, 2019).

PEER COMPARISON

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